John Charcol: Sub-prime mortgage holders may face problems

15 October 2007
People with sub-prime mortgages could face new difficulties following recent uncertainty within the financial markets, it has been claimed.

Ray Boulger of John Charcol told BBC Radio 4's PM programme that people with poor credit histories could be likely to see higher mortgage rates, while those looking to remortgage may find lenders are unwilling to give them credit.

With a number of lenders choosing to "tighten criteria", Mr Boulger said that some people may be forced to go back to their original lender on a "revert-to rate".

"A lot of borrowers in that situation are not going to be able to afford that," he commented.

Mr Boulger predicted that there would be a rise in the number of repossessions as a result.

GE Money recently reported that while 63 per cent "have faith" in the sub-prime market, one in seven said recent problems would alter the way their organizations operate.

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